March 01, 2011

The Osage Murders: Oil Wealth, Betrayal and the FBI’s First Big Case

The Osage Indian Reservation was founded in 1870. When the Osage Tribal Roll was closed on July 1, 1907, there were just 2,229 residents listed. (Photo courtesy of the FBI)

One of the most dangerous places in the United States in the early
1920s was the Osage Indian Reservation in eastern north-central Oklahoma.
During a two-year stretch beginning in 1921, at least two-dozen Osage Indians
died in increasingly peculiar ways, from suspicious suicides to explosions. Among
the Osage, it came to be known as the “Reign of Terror.”

This black chapter in U.S. history is an incredible story of oil,
greed and murder. The Osage Indians went from poverty to prosperity when huge
petroleum reserves were discovered on a corner of their reservation. But the
sudden wealth also brought great misery. Perhaps the most gruesome was the
crime spree known as the Reign of Terror – one of the first homicide cases for
the fledgling Federal Bureau of Investigation. By the Bureau’s own account, the
investigation into the Osage Indian murders remains one of the agency’s most
complicated cases.

Anna Brown, a wealthy Osage Indian of Gray Horse, Okla., whose death in 1921 led to one of the first and most complicated investigations in the FBI’s history. (Photo courtesy of the FBI)

It began in May of 1921, when a group of hunters discovered the
badly decomposed body of Anna Brown, an Osage woman, in a remote ravine in
Osage County. At first, police chalked up her death to alcohol poisoning. Later
an undertaker found a bullet wound in the back of her head. The same day the
body of Charles Whitehorn, also Osage, turned up nearby. Two months later,
Brown’s mother, Lizzie Kyle, died unexpectedly, her death blamed on bad
whiskey.

Then in February 1923, Brown’s cousin Henry Roan was shot to
death. The following month, Brown’s sister, Rita Smith, and her husband were
killed when their house exploded. One by one, Osage people in the area died
from violence or suspicious causes. As grief for the victims subsided, panic
set in.

While it became increasingly clear that the deaths were homicides,
local police seemed unable – or unwilling – to solve the crimes. Officers
routinely overlooked unusual details when an Indian passed away. Even the local
coroner seemed complicit. One victim’s body was mutilated so grotesquely during
the autopsy that the cause of death could not be determined.

By the spring of 1923, the Osage community had developed such
intense distrust of local authorities that the Tribal Council wrote to the FBI,
an organization in its infancy, to ask for help.

Rita Smith, the Osage wife of W.E. Smith, photographed here with the couple’s servant, Nellie Brookshire. On March 10, 1923, a bomb explosion beneath the Smiths’ home killed Rita and Nellie instantly. Four days later, W.E. Smith died in the hospital. (Photo courtesy of the FBI)

When agents arrived at the reservation in the spring of 1923, they
found a community so fearful that some residents had begun stringing lights
around their homes, burning them from dusk until dawn, as if to ward off the
evil that seemed to be menacing the tribe. The evil, it turned out, was closely
connected with what might have seemed a great stroke of good fortune for the
tribe. Oil was discovered on the reservation in the late 19th
century, and by 1923, the reservation was dotted with 8,579 oil wells that
annually netted $27 million, enough to make the region the richest oil-producer
in the country. An act of Congress in 1906 gave each Osage person a
“headright,” or share of the reservation’s natural resources, and in less than
three decades, the Osage people had become among the wealthiest in the world.

The tribe’s newfound affluence often prompted envy and disdain.
“Osage Indians did not always ride in limousines, squat in blankets among Grand
Rapids furniture and generally give a pathetically good imitation of nouveaux
riches the world over,” Time magazine
reported in 1932. In the bestselling 1929 novel Cimarron, Pulitzer
Prize-winning author Edna Ferber wrote about members of the tribe driving
limousines and leaving them where they crashed.

The ravine at Three Mile Creek near Fairfax, Okla., where a hunting party discovered the body of wealthy Osage Indian Anna Brown in May 1921. (Photo courtesy of the FBI)

The Osages’ wealth also attracted the worst kind of settlers: conmen, schemers and thieves. To prevent swindles on the Osage
people, the government appointed guardians to people deemed “incompetent” to
handle their finances. But the guardians were sometimes no better. Some 93
percent of tribal funds held in government trust went toward the costs of
administering the guardianship system. A government study estimated that by
1924 nearly 600 guardians had swindled some $8 million in Osage oil funds.

And with its dense forests and vast
stretches of inaccessible canyons, Osage County – which is about the size of
Delaware – became an ideal hideout for criminals on the run. According to the
FBI, one Oklahoma prison inmate would later recall a gathering in the early
1920s during which more than thirty notorious bank robbers and train bandits
met to swap stories and tricks of the trade. Lawyers flocked to the reservation
offering underhanded contracts; entrepreneurs sought dubious business loans and
single men came looking for love.

William K. Hale refused to talk with the press about the charges he faced, telling a New York Times reporter in 1926, “I will try my case in the courts and not in the newspapers.” Meanwhile, even from his jail cell in Guthrie, Okla., Hale tried to destroy the prosecution’s case by bribing, intimidating and even murdering the government’s witnesses. (Photo courtesy of the FBI)

William K. Hale, christened the “King
of Osage Hills,” was one of thousands of white ranchers who flocked to the area
during the Oklahoma Land Rush that followed the passage of The General
Allotment Act of 1887. The legislation removed reservation land from communal
ownership and allotted parcels to individuals within each tribe. (The bill also
permitted giving any “surplus” land to non-Indians.) Government officials had
hoped land ownership would help Native Americans to assimilate. Instead it
resulted in the loss of millions of acres of tribal land through leases given
to white settlers like Hale, who, according to legend, earned his fortune by
insuring his 30,000-acre plot and then ordering his ranch hands to torch it. Though Hale portrayed himself as a pillar in the community, he had
developed a reputation for corruption and became an early suspect. Hale’s nephew, Ernest Burkhart, was
married to Anna Brown’s sister, who had inherited nearly $2 million in oil
rights following the untimely deaths of family members. Moreover, less than a
week after Henry Roan’s death, Hale tried to cash in on a $25,000
life-insurance policy on Roan’s life. Incredibly,
Hale served as one of Roan’s pallbearers.

From 1923 to 1925, the FBI interviewed more than 150 people, and
four special agents worked undercover on the case. Much of the evidence they
gathered, however, was unsubstantiated rumor. Despite FBI declarations about
explosive revelations, the fledgling agency seemed to be as interested in
attracting attention to boost their budget as they were in catching a killer.
The investigation dragged on for months. At one point local newspapers reported
that the agents had actually left town.

Finally, in January 1926, authorities took Hale’s nephew into
custody. At gunpoint, Burkhart revealed his uncle’s elaborate scheme to
consolidate the oil rights of Burkhart’s Osage in-laws. Hale had also devised
an elaborate scheme to consolidate and inherit Osage headrights. First, he
convinced his nephew Ernest Burkhart to marry an Osage woman, Mollie Kyle. He
then arranged for her family – Anna Brown, Lizzie Kyle, Rita Smith and Henry
Roan – to be dispatched one by one so that she and Burkhart would inherit the
family’s wealth.

The ranch of William K. Hale, whose worth at the time of his arrest was said to be half a million dollars. According to author Dennis McAuliffe Jr., Hale earned much of his fortune by insuring his Osage pastureland for $1 an acre and then ordering his ranch hands to torch 30,000 acres one night. (Photo courtesy of the FBI)

The plot included a local bootlegger and a convicted burglar who
was released from jail by bribed guards to commit several murders. He then
secretly returned to his cell, creating the perfect alibi. Special agents also
discovered that Burkhart had been slowly poisoning his wife all along. If she
had passed away, Burkhart would have inherited the Osage family’s entire
fortune. And, of course, in the event of Burkhart’s death, Hale would have been
next in line. Hale was tried four times before a Federal District court finally
convicted him in 1929. For the dozens of murders he allegedly orchestrated,
Hale was found guilty of just one – the death of Henry Roan – and he was
paroled in 1947. The rest of the homicides remain cold cases.

Burkhart was sentenced to life in prison for his role in the
murders of the Smith family. He was paroled in 1959. In 1965, the governor of
Oklahoma, Henry Bellmon, granted Burkhart a full pardon. The Osage Nation would
ultimately pay the FBI $21,509.19 for the bureau’s investigation.

Molly Stephey is a Senior Writer for American Indian magazine and a Public Affairs Producer at the Smithsonian's National Museum of the American Indian in Washington, D.C.